Mortgage rates moved higher over the past 2 days, but managed to find their footing today.  I'll be the last person to claim interest rates and stock prices must follow one another, but at times, their relationship is the most convenient way to understand the market.  Stocks had been rising last week while rates were holding at the lowest levels since September 2017.  More than anything, this reflected optimism on both sides of the market surrounding potential Fed rate cuts in 2019.

Last Friday provided some important insight.  The hotly-anticipated jobs report came out much weaker than expected.  That's the sort of thing that would certainly make traders all the more likely to expect Fed rate cuts.  Indeed that was the case, but trading levels suggested the bond market had already found its maximum level of optimism (i.e. lowest rates) earlier in the week.  The jobs report merely restored those lows (instead of helping rates break through).  

Ever since then, and with an added push from the de-escalation of a US/Mexico trade war over the weekend, rates moved higher in an attempt to find their minimum level of optimism.  Yesterday and today suggest they may have found it!  The fact that stocks are also ebbing from recent highs suggests the overall market may have now carved out a trading range from which to approach the bigger considerations ahead.  

In practical terms, this wasn't a huge victory for mortgage rates today.  It merely helps us get back some of yesterday's losses.

Loan Originator Perspective

My clients and i continue to feel that locking is the wise call.  Bonds are currently holding above resistance but are near the lows of the range.   So lock the lows.  Tomorrow is the final treasury auction of the week, once that supply has been absorbed by the markets, it is common to see bonds improve, but not sure we can see enough improvement to warrant the risk of floating. - Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.00% 
  • FHA/VA - 3.75%
  • 15 YEAR FIXED - 3.75-3.875% 
  • 5 YEAR ARMS -  3.875-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Early 2019 saw a rapid reevaluation of big-picture trends in rates and in markets in general

  • The Federal Reserve has been a key player, and while they aren't the ones pulling the global economic strings, their response (and even their EXPECTED response) to the economy has helped rates fall more quickly than they otherwise might.

  • Based on the Fed's laundry list of concerns, the bond market (which determines rates) will be watching economic data closely, both at home and abroad, as well as trade-related concerns. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will lead to new long-term lows.  
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.